Vista projects sales tax increase, property tax decrease in '12-13

VISTA  Vista's revenues from sales taxes will go up and those from property taxes will go down next year, city officials projected in 2012-2013 budget estimates.

The Vista City Council got a preview at a meeting Tuesday night of a budget for the upcoming fiscal year, which begins July 1. The council is scheduled to adopt a final budget in June.

The presentation from City Manager Patrick Johnson also included forecasts for the upcoming five years. The financial forecast projects the city's general fund will come up short nearly $5 million by 2016-2017. But those numbers shouldn’t cause alarm, Johnson said, because the estimates for revenue are very conservative.

“Probably we’re too conservative, but we think it’s prudent to be too conservative,” Johnson said. “I don’t think it really paints an accurate picture of where we are and where we’re going to be.”

For example, he said, the projections assume revenue from property taxes will remain flat for the next five years.

“It’s probably not going to stay flat for five years,” Johnson said.

The total budget for the upcoming fiscal year is $114 million. Much of that money will go to specific funds, such as enterprise funds or assessment districts. The majority, about $62.6 million, is part of the city’s general fund, which covers most city operations, such as administration, public safety and community development, among others.

Revenues fell steadily for years. The city brought in $66.1 million in general fund revenue in the 2008-2009 budget year, $62.8 in 2009-2010 and $61.2 million in 2010-2011. Revenue increased in the current budget year to $63.37 million, but is expected to drop again next year.

Vista expects to have nearly $700,000 left over in the general fund at the end of the year and generate nearly $60 million in revenue in 2012-2013. Vista will use an additional $2.06 million in reserves. The one-time money will help cover a recurring financial shortfall, known as a structural deficit.

Vista officials had hoped to close the structural deficit by now, but the elimination of redevelopment by state lawmakers, a move that was later upheld by the state’s high court, dealt a blow to city coffers. Nonetheless, Vista administrators said they expect to close the recurring shortfall in the 2013-2014 budget year.

The built in deficit was as high as 12.3 million in the 2008-2009 budget year, Johnson said. Closing it has been difficult, as the city has cut 113 jobs and cut pay by 5 percent for all but public safety employees.

“It’s straining staff to provide the level of services that they do,” Johnson said.

Councilman Steve Gronke said a graph in the budget presentation with a trend line showing the decrease in the structural deficit doesn’t tell the whole story.

“It says nothing about the sacrifices people have made,” Gronke said. “It doesn’t show the people who lost their jobs. … It’s just been really painful along the way.”

Regular sales tax revenue is expected to rise 7 percent compared to the current budget year, whereas income from property tax is projected to dip by 2 percent. Together, the two will bring in an estimated $33.8 million, the largest chunk of general fund income. About $6.1 million of the general fund revenue is from the Proposition L half cent sales tax, a bond measure approved by voters in 2006 that funded building projects such as the approximately $55 million civic center complex, two new fire stations and the renovation of a third, renovation of the city’s Moonlight Amphitheater and construction of the Vista Sports Park.